India’s M-MRCA Fighter Deal: Cancelled

Aug 4/15: Deadline Missed Talks between India and France over the agreed sale of 36 Rafale fighters in April have now missed a negotiation deadline. Disagreement over India’s offset arrangements are thought to be the sticking point, despite France reportedly offering a 25% price reduction to initially bag the sale. The official demise of India’s MMRCA competition will likely see the Indian Air Force put additional pressure on India’s negotiators to come through, particularly as the Dassault production line is becoming swollen with new orders, pushing the Indian Rafales down the line.

What began as a lightweight fighter competition to replace India’s shrinking MiG-21 interceptor fleet soon bifurcated into 2 categories now, and 2 expense tiers. What changed? In a word, lots. The participants changed, India’s view of its own needs changed, and costs changed dramatically. With the long-delayed release of the official RFP, the competition began at last – and like all Indian decisions, it takes a very long time.

DID offers an in-depth look at the Medium Multi-Role Combat Aircraft (MMRCA) competition’s changes, the RFP, and the competitors. After a decade-long slog, Dassault’s Rafale appears to be closing in on its 1st export order.

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India’s MRCA: Changes

MiG-21 BIS(click to view full)

The original intent of India’s fighter purchase was to replace hundreds of non-upgraded MiG-21s that India will be forced to retire, with a complementary force of 126 aircraft that would fit between India’s high end Su-30MKIs and its low-end Tejas LCA lightweight fighter. While plans to develop a “fifth generation fighter” in conjunction with Russia have received a lot of press, they are uncertain at best, address a different requirement, and offer no solution to the immediate problem of shrinking squadron numbers as existing aircraft are forced into retirement.

India is a large country, with coverage needs over a wide area (see map of airbases) and on several fronts. One of which is Pakistan, whose JF-17 joint fighter program with China has India’s attention. The IAF currently has 30-32 squadrons worth of serviceable aircraft, depending on which report one reads. This is well below their target of 39 1/2. The number of IAF squadrons still flying MiG-21s of one vintage or another has now dropped to 12, and overall squadron strength is projected to plunge to 27 during the 2012-2017 period.

Lightweight multi-role fighters that could make up for declining aircraft numbers with broader and better capabilities would appear to fit that need, and India’s initial shortlist followed that template. The Mirage 2000 and MiG-29 were already in service with India in this role, and the JAS-39 Gripen offered a 4th generation aircraft whose costs and profile place it firmly in the lightweight fighter category. These aircraft served as a hedge against the potential failure of the Tejas lightweight Combat Aircraft project, and also offered a more immediate solution to plussing up numbers as existing MiG-21s and MiG-23s/MiG-27s were forced into retirement.

Since those early days, sharply improved relations with the USA introduced a pair of American planes into the competition, and India’s view of its own needs is changing. Official sources told Jane’s in February 2006 that RFPs would be issued to France’s Dassault (Mirage 2000-5 and Rafale), BAE/Saab (JAS-39 Gripen), EADS/BAE (Eurofighter Typhoon), The American firms Lockheed (F-16 Block 70) and Boeing (F/A-18 E/F Super Hornet), and Russia’s Rosonboronexport (MiG-29OVT with thrust vectoring, aka. MiG-35).

That proved to be the case, creating a 2-tiered competition that includes both lightweight and medium fighters. This trend got a sharp boost in March 2006, when the Press Trust of India (PTI) reported a surprise pullout of the Mirage 2000, even though India already flies 40 Mirage 2000Ds, and its senior officials have touted standardization as a plus factor. Its place would be taken by the heavier, more advanced, and more expensive Rafale.

India’s changing requirements have also created delays to an already-slow process. For instance, both Jane’s Defence Weekly and Defense Industry Daily have covered India’s wish to ‘significantly’ augment their strike capability and range to deal with out-of-area contingencies. That delayed the MRCA RFP, until India’s view of its own needs solidified. Another contributor to these delays has been the need to refine and clarify the new industrial offset rules introduced in 2005, amidst lobbying by American defense firms.

MMRCA: Updates and Developments

Aug 4/15: Deadline Missed Talks between India and France over the agreed sale of 36 Rafale fighters in April have now missed a negotiation deadline. Disagreement over India’s offset arrangements are thought to be the sticking point, despite France reportedly offering a 25% price reduction to initially bag the sale. The official demise of India’s MMRCA competition will likely see the Indian Air Force put additional pressure on India’s negotiators to come through, particularly as the Dassault production line is becoming swollen with new orders, pushing the Indian Rafales down the line.

Jan 12/15: India to Dassault: Take It or Leave It
Anticipating a need to finally have the MMRCA buttoned down before leaders meet in April, India’s Defense Ministry has been talking in the press about its willingness to walk away from the deal unless Dassault agrees to binding assumption of certain time and cost liabilities. Dassault can be forgiven for not wishing to assume these, given the changing and still somewhat squishy requirements the Ministry has developed. For its part, the MoD is using strong language, indicating that Dassault is “reneging” on RFP requirements.

2014

Dassault and HAL agree on workshare; Interim buy considered, but all Rafale deals are left for the next government; Reports of 100% cost escalation could make Rafale unaffordable.

Dassault: Power of One

Dec 1-2/14: Meeting of minds? French defense minister Le Drian met with his freshly appointed Indian counterpart Manohar Parrikar who said the pending Rafale deal would be “resolved in a fast-tracked manner”. That is noncommittal on the actual outcome, and even on the exact schedule. French media note that this probably means April 2015 at the earliest, as India’s new fiscal year begins, while Dassault CEO Eric Trappier recently expressed the expectation that negotiations would be wrapped up by March 2015. However, reports in the Indian media don’t show a lot of progress in reconciling Indian expectations that Dassault should guarantee Indian-made Rafales, a sticking point since early 2013.

A subsequent statement by a spokesman of the Indian Ministry implied a desire to close the deal, and the number of aircraft at stake is maintained at the original 126 aircraft. French President Hollande commented that “you always have to be prudent with such contracts” until their signed.

During his visit Le Drian made friendly overtures to the “Make in India” policy, and the two countries have other deals under way, so there may be a common willingness to work together. However that cannot be achieved by simply asking Dassault to bear manufacturing risk it doesn’t control. And others such as Boeing have made similar broad statements. Being ready to “make in India” doesn’t mean you’d like HAL to be the local maker.

Meanwhile, as Airbus starts to exit Dassault Aviation’s capital, the French government signed an agreement with parent company Groupe Industriel Marcel Dassault (GIMD) that grants preemptive rights to the government in case of a future sale. Their goal is to guarantee that the aircraft manufacturer will stay under French control. But the sustainability of Rafale production in future years still relies on foreign sales.

“The 18 direct fly away aircraft are expected to be delivered in three to four years from the signing of the contract. The remaining 108 license manufactured aircraft in India are expected to be delivered during the following seven years.”

Sources: Indian Government PIB, “Procurement of Rafale Fighter JET”

July 4/14: Order cut? French ministers continue to express confidence that 2 years of negotiations will produce a deal at some point, but Fabius notes that “there is a difference between [taking] some time and too long.” There are real obstacles. Government bureaucrats are expressing doubt that a deal can be signed before the current fiscal year end in March 2015, and some media outlets are reporting a potential order cut to 80 planes. Meanwhile, Saab remains in the wings with a proposal to become a major partner in India’s Tejas Mk.II.

The biggest problem with the deal appears to be life-cycle costs, something India hasn’t really dealt with before. A deal of this scale and complexity is a very tough place to start. The 2nd problem is that the Rafale’s absolute buy costs are also rising, in part due to India’s own conditions. That creates the 3rd problem, which is difficulty in making the 15% down payment within a budget that’s only expected to rise by government-calculated inflation figures.

French sources interviewed say they aren’t aware of any move to cut the order, but dna and the Deccan Herald are reporting that this has become an option. Once again: holding a military competition of this size, with no consideration for budget, was a foolish approach. Sources: India’s Business Standard, “Rafale contract elusive, Eurofighter and Saab remain hopeful” | Deccan Chronicle, “India may curtail Rafale demand” | Defense World, “Will Cost Escalation Down-Size Rafale Jet Contract?” | India’s Economic Times, “Confident of $12-billion Rafale deal with India, says French foreign minister Laurent Fabius” | Sunday Standard, “Stuck in Works, Rafale Deal Fails to Take Off”.

June 2/14: New Man. The BJP’s Shri Arun Jaitley takes over as Defence Minister, while also holding the ministries of finance and corporate affairs. He himself says that MoD will be a temporary assignment, leading many observers to wonder what’s going on. The answer may lie in the Ministry of Finance’s repeated sabotaging of military modernization project approvals. The Times of India writes:

“The finance ministry is often blamed for being a “big obstacle” for military modernisation plans. But with Arun Jaitley straddling both MoF and MoD as of now, there is “hope”…. Jaitley, on being asked by TOI if there was “a conflict of interest” in handling both the ministries, replied, “Well, I see it as supplementing of interest”

That may be necessary. A separate Times of India article offers a snapshot:

“The threat is greater along the country’s northern border with China developing its military capabilities rapidly. In India, the deal for 126 Medium Multi Role Combat Aircraft (MMRCA) is yet to be inked. Even if there is some rapid development, [delivery] won’t be till 2017-18…. India’s indigenous Light Combat Aircraft (LCA) Tejas is not yet ready. As a result, the IAF is now straddled with obsolete aircraft that can’t match China’s capabilities. The Chinese move to develop more airbases in the Tibet Autonomous Region (TAR) is intended to exert more pressure on India,” a senior officer said. Former IAF chief Air Chief Marshal NAK Browne, before his retirement, had openly admitted that the country is facing a shortage of fighter aircraft and needs to replenish its fleet. However, there is no immediate respite in sight. The Eastern Air Command (EAC), entrusted with air dominance over the country’s North East is badly affected…. The outdated Mig-21s are the mainstay of the EAC.”

If a unified minister can get the Project 75i submarine RFP out, finalize the Black Shark heavyweight torpedo buy, and make a decision about India’s M-MRCA program, he could do a tremendous amount of good for India’s defenses in a very short time. Sources: Indian Gov’t, “Arun Jaitley takes over as Defence Minister” | India’s Economic times, “BJP men, others fail to find logic in alloting defence to Arun Jaitley” | Times of India, “Modi govt must act fast to save India’s depleting submarine fleet” and “IAF’s fighter fleet needs immediate replenishment”.

June 1/14: Rafales in India. A set of 4 French Rafale fighters arrive in India for the Garuda-5 exercises. The exercises will take place at the Jodphur Air Base from June 2/14, and will involve IAF Su-30MKI, MiG-27 and MiG-21bis planes, with the Defence Minister and other high level attendees present. If reports of massive cost increases are true (q.v. Jan 26/14), the time pressures India is under could make these exercises undeservedly important to the new government’s M-MRCA decision. Sources: Zee News, “French airforce contingent arrives in India for ‘Garuda-5′”.

March 2/14: Workshare deal. Dassault and HAL have reportedly established an initial workshare agreement for Indian Rafales. Dassault will provide the first 18 planes from its own factories in fly-away condition. After that, HAL will be responsible for directing 70% of the work in India, while Dassault remains responsible for 30%.

Negotiations have included industrial coordination, as well as straight workshare. For instance, RBE2-AA AESA radar production will be outsourced to state-owned Bharat-Electronics Ltd (BEL) in Bangalore, while the corresponding radome will be manufactured by HAL. One step toward the agreement involved HAL setting up a new facility close to the one that BEL has in Bangalore, so that issues with radome or radar production won’t create compatibility problems that leave India’s Rafales unable to meet acceptance tests.

Per February revelations, the purchase contract will have to be finalized by whichever government wins India’s coming election. Sources: Indian Express, “India seals Rafale jet deal with French firm” | NDTV, “A big step in India’s Rafale jet deal with France”.

Workshare deal

Feb 6/14: Budgets. Defense minister AK Antony tells reporters that India’s Ministry of Defence has exhausted its capital budget, and won’t be able to sign any MMRCA contracts until the next fiscal year. In other words, until several months after the coming election. That effectively prevents any prospect of lock-in by signing an initial contract for 18 Rafales direct from France (q.v. Jan 9/14). Sources: The Times of India, “‘There is no money left’: Govt delays Rafale fighter jet deal” | Bloomberg, “India’s $11 Billion Rafale Jet Deal Delayed Amid Budget Crunch” | Reuters, “India delays Rafale deal after exhausting capital budget”.

Jan 26/14: Budget blowout. In a Sept 4/12 article, Abhijit Iyer-Mitra boldly said that: “…any intelligent person who bothered studying the publicly available costs would have fixed the [Rafale’s] price at $27 billion as far back as 2009.” We said that time would tell. Which makes this dna India report so interesting:

“In January 2012, when Rafale was declared the winner, its price was quoted between $60-65 million (Rs373-Rs400 crore). A top defence ministry official said the price of a fighter jet made by Dassault could now cost $120 million (Rs746 crore). The second bidder, Eurofighter, had quoted $80-85 million (Rs497-Rs528 crore)…. [Under current prices, a 126-plane Rafale deal] would cost India nothing less than $28-30 billion (Rs1.75 lakh crore-Rs1.86 lakh crore),” said an Indian Air Force (IAF) official, who is privy to discussions of the cost negotiation committee.”

Jan 21/14: Budget crunch. India’s Air Force is directly criticizing the Russo-Indian FGFA joint stealth fighter program, according to the minutes of a Dec 24/13 meeting chaired by secretary of defence production Gokul Chandra Pati:

“Business Standard has reviewed the minutes of that meeting. The IAF’s three top objections to the FGFA were: (a) The Russians are reluctant to share critical design information with India; (b) The fighter’s current AL-41F1 engines are inadequate, being mere upgrades of the Sukhoi-30MKI’s AL-31 engines; and (c) It is too expensive. With India paying $6 billion to co-develop the FGFA, “a large percentage of IAF’s capital budget will be locked up.”

On January 15, the IAF renewed the attack in New Delhi, at a MoD meeting to review progress on the FGFA. The IAF’s deputy chief of air staff (DCAS), its top procurement official, declared the FGFA’s engine was unreliable, its radar inadequate, its stealth features badly engineered, India’s work share too low, and that the fighter’s price would be exorbitant by the time it enters service.

Top MoD sources suspect the IAF is undermining the FGFA to free up finances for buying 126 Rafale medium multi-role combat aircraft (MMRCA) for an estimated $18 billion, an acquisition that has run into financial headwinds because of budgetary constraints….”

Perhaps if India hadn’t structured its MMRCA competition to completely ignore the costs of the competing aircraft, this wouldn’t be happening. But they did, and it is. Sources: India’s Business Standard, “Russia can’t deliver on Fifth Generation Fighter Aircraft: IAF”.

Jan 13/14: Negotiations. India Today reports that a team of French officials from Dassault, Thales and Snecma is in Bangalore talking to HAL at the IAF’s request, in an attempt to resolve the workshare and responsibilities issues that are holding up the deal. As one source put it:

“The difficult part of the negotiations over the transfer of technology and the mandatory [industrial package] spin offs have already been finalised but there is uncertainty about who will provide what”.

Given India’s proposed deal that would give HAL control over the project, but financially penalize Dassault for any failures (q.v. April 5/13), that isn’t exactly surprising. Sources: India Today, “Dassault seeks to end Rafale log jam with IAF”.

Jan 9/14: Interim buy? AIN reports that India may opt for an interim buy of the 18 Rafales that are supposed to be manufactured in France anyway. Negotiations would still need to take place over the remaining 108 aircraft that would be built in India, and there would be long delays before India’s Rafale fleet would grow, but a deal would do 3 things. First, it would allow IAF pilots to begin training. Second, it would reassure foreign firms after a string of confidence-shaking disbarments and cancellations without evidence to back them up. Third, it would lock-in the Rafale as India’s chosen aircraft. With budgets under pressure and so many projects competing for dollars, an MMRCA program that has ballooned to 180% of its original cost projections may need that lock-in to avoid a years-long re-compete. The flip side is that it would weaken India’s negotiating position with Dassault over that follow-on contract.

India will have to move quickly, because a government code of conduct prevents any contracts being awarded within 45 days of an election, which is expected in March. Sources: AIN, “India May Close Interim MMRCA Deal Soon – Plus MRTT”.

2013

Rafale w. Damocles(click to view full)

Dec 26/13: Sub-contractors. Dassault Aviation is reportedly conducting gap analysis of state-owned HAL’s fighter plane production capabilities. There may be quite a few, given HAL’s recent performance on a number of other projects. HAL officials say that they have a structure in place to do something meaningful with the recommendations:

“HAL has created a dedicated full time MMRCA Project Group in May 2012 and it is operational since then. Action groups have been created at all HAL divisions taking part in the MMRCA programme. All groups are working in a coordinated manner to interact with the Original Equipment Manufacturers.”

Dec 18/13: Brazil. Brazilian President Lula may have greatly favored the Rafale, but the Ministerio da Defesa eventually picks Saab’s Gripen-NG as their preferred bidder, and expects to buy 36 planes for $4.5 billion. The news doesn’t shake India’s resolve, but it does enhance the government’s leverage in negotiations. If Dassault’s Indian opportunity collapses now, the Rafale would become very difficult to export anywhere. Read “F-X2: Brazil Picks Saab’s JAS-39 Gripen-NG over Rafale, Super Hornet” for full coverage.

Dec 10/13: Sub-contractors. PTI reports that Dassault Aviation and India’s NYSE-listed Reliance Industries are planning to set up a Bangalore facility to produce Rafale wings for India’s future order, and reportedly have the approvals they need to do so.

The facility would reportedly cost about INR 10 billion ($248 million) to build, but the ultra-modern facility would leave Reliance in a strong position to leverage additional civil and defense-related aerospace work. That would be a new sector for Reliance, but Dassault is impressed with them, and reportedly wanted to use Reliance as the Rafale’s main Indian manufacturing contractor.

India’s government insisted on the state-owned HAL instead, but Dassault may still see a larger opportunity. If Reliance can produce quality assemblies at a cost savings, outsourcing some production for future orders could help Dassault lower their cost per jet, while meeting India’s targets for industrial offsets. Sources: FirstPost.Business, “Reliance, Dassault may join hands to make wings for Rafale fighter jets”.

Sept 13/13: Weapons. Russia’s Tactical Missile Corporation (TRV) told journalists at MAKS 2013 that they’re negotiating with Dassault Aviation for the possible use of their missiles on India’s Rafales.

India bought MBDA’s MICA air-to-air missiles for its Mirage 2000s, but Rafale-compatible weapons don’t otherwise feature prominently in India’s existing stocks. Unless the partnership develops a Universal Weapon Interface for TRV’s products, and probably modifies a number of the missiles themselves, that kind of integration and testing is expensive. Less expensive than buying new weapons? And what’s the capability payoff? That’s what negotiations, and business analysis, need to determine. Sources: TRV Products page, via WayBack 2013 | AIN, “Russian Missiles for India’s Rafales?”.

June 20/13: Negotiations.IANS reports that India’s Minister of State for Defence Jitendra Singh told an audience at the 50th Paris Air Show that the Rafale deal:

“…is not stuck anywhere. It is the biggest deal of its kind in the world and, of course, a very complex one too. They are talking to HAL and the private sector companies in India as well; so it is progressing…”

Caveat: India has a different definition of “progressing” than most countries. Then again, in his first Le Bourget press conference as Dassault CEO, Eric Trappier had made a similar-sounding statement a week earlier.

April 5/13: Negotiations. Dassault remain publicly confident that a deal will be done, but a reports that the deal will be delayed until July at least sheds some light on the key points beyond cost. Business Standard:

“Some of the issues between the two sides include Dassault’s demand for two separate contracts to be signed for the deal which includes one for the 18 aircraft to be built by the firm in France and the other for the 108 aircraft which are be integrated in India by the HAL. The Defence Ministry is not in agreement…. [and] earlier also rejected Dassault’s demand for making it the lead integrator… in India…. Dassault has also signed an MoU with the Reliance Industries Limited and wants to give a bigger role to it in the production phase in India is areas such as supply chain and project management.”

That’s a very sensible approach if you have serious concerns about your local partner’s ability to deliver (q.v. Feb 7/13). Dassault has publicly said that HAL’s role is clearly understood, but then they’d have to say that. Their concerns seem very justified given HAL’s significant problems with the indigenous Tejas LCA fighter, and with timely completion of contracts involving BAE’s Hawk trainers and Sukhoi’s SU-30MKI fighters. Business Standard | Livemint | OneIndia | Reuters.

Feb 7/13: Negotiations. While a French Rafale-B performs at Aero India 2013, negotiations grind on. India’s defence minister, A K Anotony, describes negotiations as a 6-7 layer process, which then has to be sent to the Ministry of Finance. There will be no deal during Aero India, as the contract simply isn’t ready. Antony adds that coming defense budget cuts won’t delay the Rafale deal, but an election looms in 2014.

India’s Financial Express cites anonymous “highly placed sources” who say that remaining friction involves industrial issues. The Dassault team that visited the HAL facility in Nashik were said to have been disappointed by the infrastructure in place, and concerned that HAL will have trouble absorbing the required technology. They’re also reportedly wrestling with India’s insistence on giving HAL ‘lead integrator’ responsibility for decisions about workshare with other companies, while sticking Dassault with overall responsibility for the project. The French are trying to use the RFP as a starting point for discussions, while India insists that the RFP’s terms are the final word. Economic Times | Financial Express.

Jan 28/13: PDL NG pod. France’s DGA commits a EUR 55 million risk reduction contract for Thales to develop the next-generation PDL NG surveillance and targeting pod, as the successor to the Damocles pod. Deliveries are expected to take place beginning in about 5 years, from 2018-2022, and the project as a whole will cost about EUR 450 million for development plus 45 pods.

The DGA touts this as a boost to the export attractiveness of French fighter jets, which is true. Targeting pods have become such an important ancillary that the Rafale can’t really remain competitive without one that meets modern high-end standards. The bad news is that the Rafale will receive a pod in 2018 that’s roughly equal to Sniper-SE and LITENING-SE pods being delivered right now, while its competitors keep improving with new sensors and modules. India, whose Mirage 2000s are getting life extensions, is an important target for the PDL-NG, because they could use the pods across 2 fighter fleets. On the other hand, India uses LITENING pods on many of its fighters, and could simply decide that Rafale integration with the LITENING pod was its best option on technical and fleet support grounds. French cooperation integrating a non-French pod would be the sticking point, and it would probably need to be addressed up front in the main contract. French DGA | Les Echos | Usine Nouvelle.

2012

Rafales(click to view larger)

Sept 4/12: No documents? A columnist for Delhi’s Daily Pioneer alleges that Dassault did not meet the deadline for submitting final documents to India. Abhijit Iyer-Mitra adds that beyond issues of technology transfer, there was a lowballing strategy at work:

“The deciding factor that won the Rafale the competition was its lower cost. Even a cursory glance at the Rafale’s costing for the French Senate done in 2009 indicated a unit price 2.25 times of what the French quoted us, not factoring in inflation… What can one expect from here? Four things: First, Dassault’s final submission will take much longer to materialise – possibly another year or so. Second, a stream of news reports that we’ve already heard a thousand times before will come out telling us how unprepared our institutions are to receive this technology. Third, when that document from Dassault does indeed materialise, expect a minimum 170 per cent jump in costs attributed to “time delay”, “unforeseen problems” and “supply chain variables”. Let’s not forget that, when this competition started out in 2007 the deal was meant to cost us $10.6 billion. Now the figure has already doubled to $20 billion, while any intelligent person who bothered studying the publicly available costs would have fixed the price at $27 billion as far back as 2009… At some point, one needs to introspect very deeply.”

That’s a clear set of markers, so in time we’ll see whether or not he’s right. He certainly has sharp disagreements with IDSA, an independent think tank whose briefing concluded that Rafale is too important to the IAF, and must have a contract soon. That seems to mark a shift in their position from June 2012.

The larger question is whether India could absorb a significant price hike beyond $20 billion, or if that would force the IAF to abandon their previous “price is no barrier” attitude and redo the competition. Daily Pioneer | IDSA.

Aug 21-23/12: Re-open MMRCA? Deputy Director of Russia’s Federal Service for Military Technical Cooperation, Vyacheskav Dzirkaln, tells Interfax-AVN News that Rafale negotiations were having problems over issues of financial terms and technology transfer. He adds that Russia is prepared to bid again, as:

“I wouldn’t say that the MMRCA tender is a closed issue. We have information that the tender is still up in the air,”

The Russians have been wrong about M-MRCA developments before, but this statement gets additional credence from an unusual source: Germany. The deputy chief of the Bundestag’s foreign and defence affairs committee, Andreas Schockenhoff, told the Times of India that “There have been discussions between German and Indian officials and I can say that this is not a closed book yet.”

On the other hand, French media are getting reassuring noises from Dassault, and say that the deal will be done as a series of agreements to produce specific items in India, with the scope growing over time. L’Usine Nouvelle cites complex electronics, and especially Thales RBE2-AA AESA radar, as being difficult to transfer. India’s failure with its Tejas fighter’s multi-mode radar, which was a generation behind AESA, does lend credence to that view. The Hindu | IBN Live | Times of India | L’Usine Nouvelle [in French].

“The issues raised by you were examined by independent monitors who have concluded that the approach and methodology adopted by the Contract Negotiations Committee (CNC) in the evaluation of the commercial proposals thus far, have been reasonable and appropriate and within the terms of the Request for Proposals (RFR) and Defence Procurement Procedure, 2006.”

India’s history shows that this is a big moment for the M-MRCA program, preventing its derailment and allowing negotiations toward a contract to continue. Hindustan Times.

June 11/12: The quantity trap.India’s IDSA is the bearer of some unpleasant news, given the M-MRCA competition’s deliberate decision to exclude costs from its shortlist:

“…actual fighter aircraft strength has fallen to close to 32 squadrons. These reduced numbers are of major concern to the IAF… This [M-MRCA] programme for 126 aircraft, despite licensed production of all but 18 aircraft, is still likely to cost between US $10 and 20 billion. While it was presumed a few years ago that funds for defence would not be a constraint in the future, a slowing economy has led to these funds being curtailed… The writing on the wall is clear: resource constraints are looming for the armed forces.”

IDSA recommends more indigenous production instead, without acknowledging that technology limitations and failures to deliver were the impetus behind M-MRCA in the first place. Having designed a competition slanted toward the 2 most expensive fighters, the IAF has few ways out of its self-created box. India could cut the M-MRCA buy, and use the funds to buy more of HAL’s Tejas lightweight fighters. The problem is that Tejas is experiencing production rate issues, and isn’t fully fielded yet. India could re-do the M-MRCA competition with cost as a factor this time, adding years to the process. Or it could go ahead with the full M-MRCA buy, and forego a number of other defense projects to pay for it.

March 22/12: Allegations. Indian Defence minister A.K. Antony orders the Ministry to probe all of the allegations made by Rajya Sabha (Parliamentary upper house) member M.V. Mysoora Reddy. The Telgu Dessam party representative filed an official complaint on Feb 27/12, over alleged irregularities in the evaluation process that designated France’s Rafale as the L-1 lowest cost option for India. The probe is expected to delay the process by a couple of months, if nothing surfaces. If the claims get any traction, India’s procurement process could come to a complete halt.

Telgu Dessam is a small regional party that represents the large south-eastern province of Andhra Pradesh. They’re not part of the governing Congress coalition, or the BJP-led opposition. Instead, they’re part of a loose “Third Front” of hard-line Marxist and regional parties. See Deccan Chronicle | MSN India.

Jan 31/12: India’s pick. The rumors turn out to be true, even after the complex life-cycle cost and industrial calculations. Some reports place its cost as $5 million lower per plane. Next steps include the negotiation of a contract, in parallel with parliamentary approval and budgeting.

Until a contract is actually signed, however, India’s procurement history reminds us that even a “close” deal is just 1 step above a vague intention. Even the French government sees a deal as an 80% probability within 6-9 months, and that may be optimistic. The budgeting is likely to be even trickier. The IAF’s exclusion of cost considerations in picking its finalists means that the only question now is: how far over the stated budget will a full Rafale buy go? Some reports place the deal’s cost at around $15 billion – an increase of up to 50% from previous estimates.

Unless the number of planes in the contract is reduced accordingly, or the Euro plunges very sharply during negotiations, those extra monies have to be committed. India’s armed forces and politicians would have to either draw on growth in the overall defense budget, or sideline other defense programs to pay for M-MRCA. If economic downturns or squeezed defense budgets make those outlays a big enough issue, early enough in the process, it could re-open the competition completely. British PM David Cameron has expressed an intent to change India’s mind, and both Saab and Boeing are still positioned within India, in order to be ready for a renewed opportunity. An Indian Express report even adds that:

“…government sources told Reuters about the $15 billion deal that France’s Rafale jet was the likely winner, adding that the defence ministry was now considering buying another 80 or so jets and could invite bidders excluded from the current process to take part.”

2011

Navalized Typhoon(click to view larger)

Nov 4/11: Final bids opened. India opens the final bids, which are reportedly within the range of $80-110 million per aircraft. At $80 million each, 126 fighters may come in just under budget. At $110 million each, the cost rises well over budget to $13 billion. Indian officials have said that they are prepared to raise their budget if needed. The realities of Indian procurement will create difficulties, however, unless the move has very strong and high level political support.

Indian media report that the Dassault’s base bid was slightly lower, but the final “L-1” bid costing will also include life-cycle costs over 6,000 flight hours, costs of technology transfer, and other factors. It will take a few weeks to even arrive at a verifiable cost model to determine each bidder’s L-1, and begin establish which is really the lowest price. Some reports suggest that an answer could be forthcoming by the end of the year, but based on past performance, early 2012 is a more realistic expectation.

Oct 9/11: Despite reports that India would announce a winner on Oct 7/11, Air Chief Marshal Norman Anil Kumar Browne says that all India is doing is approving the finalists’ industrial offset offers, and giving each firm the chance to make its final bid.

July 11/11: Boeing and Lockheed Martin representatives attend a government-to-government debriefing between Indian and US officials. They later pronounce themselves satisfied by the explanations received. Flight International.

“We are monitoring the situation, and we have not packed up our things and left… We have an extremely good aircraft and we have not given up.”

That may not be a bad idea. Barring an extremely good deal, it is difficult to see how India can afford 126 Rafales or Eurofighters for the price they want to pay. If negotiations with the shortlisted firms fail, identified deficiencies with the F-16 and F/A-18, and negative experiences with the MiG-29, would leave the JAS-39NG in good position.

June 3/11: CEIP post-mortem. Ashley Tellis of the liberal-realist Carnegie Endowment for International Peace, whose “Dogfight” report took an in-depth look at the competition before the shortlist was released, concludes that key technical weaknesses were the reason that the American fighters lost. That conclusion is offered despite his own earlier recommendation that India pick an American aircraft, and follows a 3-week trip to India that included meetings with top Indian government, military and industry officials. His overall conclusion:

“…the deeper problem with the current two-step approach is… that it potentially permits a costly misallocation of defence resources that could over time subvert India’s larger national security. Simply put, a procurement process that does not include shadow prices in the first step of its evaluation is fundamentally flawed… There is no such thing as ‘best’ technology in the abstract, especially where defence procurement is concerned. The pre-eminence of any war-fighting technology in the real world can be judged only against the constraints of price – and, particularly in regards to India, against additional variables of consequence… what economists call, ‘constrained maximization.’

…The current Indian procedure of attempting to first select technology without reference to any other constraints leads inexorably, using an infamous American example, to purchasing a USD640 airplane toilet seat. By pristine technical standards alone, it is certain that the more expensive toilet seat outperforms its USD64 counterpart under the widest range of conditions, but the critical question is whether the differential in marginal price is worth the commensurate difference in performance.”

According to Tellis’ sources in the IAF, India’s priorities revolved around dogfighting abilities and aerodynamic performance. That killed the F-16IN, whose conformal fuel tanks enable longer-range strike, but slow its turn rate and impair handling performance. The F-16 also raised concerns regarding its growth potential, and assurance against obsolescence within 15 years. The same aerodynamic focus reportedly killed the F/A-18 E/F Super Hornet, whose acceleration issues are known, and whose maneuverability would never be competitive with the Rafale, Eurofighter, Gripen, or MiG-35. One odd wrinkle is that the IAF accepted the Dassault & Eurofighter’s promises of AESA radars, which remains in development, but turned down similar promises from Boeing re: a 20% thrust boost from the Super Hornet’s developmental F414 EPE engine. CEIP release, incl. full FORCE magazine article [PDF] | Flight International.

April 27/11: Shortlist – Rafale vs. Eurofighter. With existing bids set to expire on April 28/11, India’s MoD reportedly sent letters to Eurofighter GmbH and Dassault, extending the validity of their bids. The net effect of this is that bids from the other 4 contenders will expire on the 28th, removing Lockheed Martin’s F-16IN Block 70, Boeing’s F/A-18E/F, Russia’s MiG-35, and Saab’s JAS-39NG from the competition.

The elimination of both American competitors is something of a surprise. The F-16 was widely seen as having little chance, but the F/A-18 E/F Super Hornet was another matter. Absent any statement or confirmation from India, analysts are left guessing as to the reasons for India’s choice. A US defense industry association’s magazine wonders if US military technology export restrictions played a role. Others are asking questions about the strength of the US-India relationship under Obama. Carnegie Endowment scholar Ashley Tellis, who has covered the competition via an in-depth report, said that:

“As best I can tell, the downselect was made entirely on the basis of the technical evaluations – the cost of the aircraft or the strategic considerations did not enter into the picture.”

“Air Marshal PK Barbora, Ex Vice Chief of Air Staff said, “The Air Force is not looking at price. That’s not our area of concern. What we want is QRs are focussed on technical aspects, latest technology.”

That’s an… interesting attitude, since price affects whether or not India can actually field the number of planes the IAF says it needs.

April 2/11: Another government deadline blown. For the second time in row, the Indian government is looking to extend the M-MRCA competition and lock in bid prices. At present, the current set of bids will expire on April 30/11, and some estimates place the cost of the extention at up to $1 billion.

The more significant worry is that this deal will become like many other Indian deals, and wind up being completely un-executable as endless allegations and investigations prevent any buy whatsoever. That sounds difficult to believe for a critical military asset like fighters, but this is exactly what has happened to India’s equally important artillery forces. StratPost Magazine explains the industrial angle | India’s Financial Express | Kolkata Telegraph.

March 23/11: Shoot the messenger? Dassault Aviation country manager P.V. Rao reports IAF Wing Commander A.K. Thakur to the Defence Ministry for demanding an INR 20,000 bribe in exchange for a favourable spot at Aero India 2011. In response, he’s barred from any dealings with the IAF, until his exact role is investigated. The Times of India claims that:

“The air force is irked by the fact that Rao kept it in the dark about its officer asking for bribe and instead got a senior IAS officer to expose the corruption. A senior officer claimed Rao deliberately didn’t follow known procedures, which was to inform IAF senior officers. It’s also possible that IAF establishment didn’t inspire Rao’s confidence.”

An IAF Court of Inquiry has been initiated in Bangalore under a Group Captain, and its official job is to try to establish who esle might have been involved, if any other companies were targeted, and what they did about it. IBN | Times of India.

“Boeing, which is offering its F/A-18IN Super Hornet, expects the delay-plagued project to take a decisive step forward as soon as next month, when a shortlist of contenders could be drawn up. “Indian military officials have been quoted recently saying they want to make an initial downselect decision possibly as soon as next month,” said Boeing spokeswoman Mary Ann Brett.”

Note the duelling statements between the IAF and MoD on this very issue, q.v. Feb 10/11 entry.

March 2/11:A British NAO report is very critical of the UK MoD’s management of the Eurofighter Typhoon program, including delivered capabilities, support arrangements, and readiness. The report could complicate the aircraft’s chances in India. See also The Register

Feb 21/11: Navalized Eurofighter? Aero India 2011 sees Eurofighter and BAE unveil an interesting wrinkle: an initial design for a navalized Eurofighter than can operate from aircraft carriers, based on an internally-funded set of studies and simulations. In a direct nod to potential Indian sales, they tout the plane as being able to take off from “ski jump” carriers without catapults – a design that describes all of India’s current and planned carriers, as well as the initial design for Britain’s own Queen Elizabeth Class.

Eurofighter GmbH descirbes the goal as 95% commonality with land-based aircraft, and required changes as “limited… include a new, stronger landing gear, a modified arrestor hook and localised strengthening on some fuselage sections near the landing gear, as well as updates the EJ200 engines,” which could include thrust-vectoring in flight.

India is currently planning to use MiG-29Ks as its naval fighters, but it’s currently the type’s only customer, and participation in a naval option could make Typhoon more attractive to India. Britain is planning to use the F-35C from its future carrier, but further cost increases or delays for the multinational program could open an opportunity for a jet type that the RAF already flies. At present, however, the UK has firmly rejected the naval Eurofighter option. Eurofighter GmbH | India Defence.

Feb 18/11: HAL a hindrance? WikiLeaks cables reveal critical assessments of HAL’s capabilities by US ambassador Tim Roemer, following a February 2010 visit to one of their facilities.

“The potential for HAL to successfully partner with US firms on a truly advanced aircraft remains untested and suspect… [they are] two to three decades behind the United States and other western nations [and given the facility’s lack of automation and safety provisions, US firms would have to take care to] understand the management and technological experience [limitations] of Indian firms”.

That assessment is widely held beyond the US embassy, but the experience of other cooperative programs, from SU-30 fighters, to Hawk trainers, to Scorpene submarines, shows that Indian governments and their state-owned firms will almost never admit local shortcomings. Planning for those shortcomings, and for public responses to delivery failures, is likely to be one of the key challenges facing foreign M-MRCA partners. Defence Management.

Feb 10/11:Aviation Week reports mixed signals about M-MRCA, “…with Defense Minister A.K. Antony indicating the final choice will be pushed into 2012, but the country’s top air force official pointing to a selection this October.”

Some saw it as the military’s way of keeping the pressure on India’s bureaucratic political process. Others jusrt pointed out that the industrial review and last phase of the selection hasn’t even beguun yet, and will be co,mplicated by a January 2011 amendment that lets commercial aviation and homeland security work count as M-MRCA industrial offsets. That lateness, and the Indian government’s generally slow pace, make a 2011 selection unlikely.

Feb 8-9/11: EADS. EADS Cassidian formally opens a new Engineering Centre in Bengaluru, India, with expected core competencies in the areas of Radar Systems, Protection Systems, Avionic Systems, Engineering IT & 3D Visual Simulation, Aerostructure and Aerospace Modelling & Simulation. Cassidian plans to increase the current set of 60 employees to more than 200 by the end of 2012, and integrate the new centre within Cassidian’s global Engineering Organization.

At the same time, Indian authorities have approved a 26%/ 76% joint venture between EADS Cassidian and Larsen & Toubro (L&T) in Mumbai. The JV will be based in Talegaon near Pune and in Bengaluru, focused on electronic warfare, radars, avionics and mobile systems (such as bridges) for military applications. The joint venture will cooperate closely with Cassidian’s new Bengaluru engineering centre. Engineering Centre | Cassisian and Larsen & Tourbo partnership | See also Eurofighter GmbH’s announcement re: its India industrial strategy – which is extremely light on details.

Feb 8/11: Saab. Saab announces the establishment of a Research and Development Centre in India, with an initial base of 100-300 Indian engineers. Areas of focus would cover aerospace, defence and urban innovation including civil security.

See also Saab’s “India – an important part of Saabs production flow“, which covers Saab Aerostructures’ industrial strategy more generally. To date, Saab is working with Tata Advance Material (small to medium sized composite parts), QuEST Engineering (sheet metal and machined parts), and CIM Tools (machining and sub-assemblies). Saab officials also stressed existing tie ups with HAL, where Saab components are already featured on export variants of HAL’s Dhruv Advanced Light Helicopters. Meanwhile, campaign director Eddy de la Motte reiterates promises of full technology transfer on all critical sub components, including the AESA radar. Saab Group | India Defence.

2010

“…has come top in the Indian Air Force’s technical assessment of rival bids… If the Typhoon clinches the deal, India would become the consortium’s third-largest customer and an unofficial “fifth partner” in the project. Thousands of new jobs would also be created in India, including a new EADS avionics plant. Britain, Germany, Italy and Spain are waging a joint diplomatic campaign to support the Typhoon bid… A senior Indian official has told The Sunday Telegraph that its air force’s technical findings have been forwarded to the defence ministry, where a final decision is expected to be made in the next few months. “There are a number of cost and strategic considerations which still have to be looked at, but in purely technical terms, Eurofighter is ahead,” the official said.”

Oct 29/10: Competition.Livemint interviews a number of senior executives from Eurofighter-related firms, as they discuss the potential Indian deal. Participants include Eurofighter GmbH CEO Enzo Casolini, Cassidan (EADS) Air Systems CEO Bernhard Gerwert, and BAE Systems’ managing director of Typhoon mission support and international programmes Christopher Boardman.

Oct 25-28/10: Jet engine jolt. NewsX’s Vishal Thapar broadcasts a reports that a Eurojet consultant has been expelled from India for illegally obtaining information on GE’s bid, trying to substitute a new Eurojet bid by offering a monetary inducement, and then planting media reports that Eurojet was ahead on price. Thapar also claims that this is why the Indian MoD took the unusual step of announcing GE as its low-cost bidder, before a contract was signed.

The follow-on effects could be very severe if true, making it very difficult for India to pick the Eurofighter as its M-MRCA medium fighter. Eurojet’s communication agency subsequently issues the following denial. See India Defence:

“Eurojet Turbo GmbH categorically denies unfounded allegations made in the NewsX report titled ” India expels arms dealer”, authored by Vishal Thapar and released on 23 October 2010. The report lacks any factual base and is a work of fiction.”

“Eurofighter, its partner companies and the four nation members of the European consortium Germany, the UK, Italy and Spain, are fully committed to deepening the strategic partnership with India. Paving the way for this long-term cooperation, the Supervisory Board of Eurofighter GmbH is meeting in New Delhi for the first time. CEOs from Eurofighter partner companies (EADS, BAE Systems and Alenia Aeronautica) are visiting New Delhi from 25th to 26th October 2010. The Supervisory Board will support the ongoing Medium Multi-Role Combat Aircraft (MMRCA) campaign and propose to the potential Indian partners additional opportunities for industrial and technological cooperation.”

Oct 18/10: Indra Dhanush. Britain and India hold Indra Dhanush 2010, and the exercise will feature British Eurofighters again. The RAF is sending Eurofighter Typhoon, E-3D Sentry AWACS, and VC10 aerial refueling planes. The IAF will field the SU-30 MKI, Mirage 2000s, MiG-27s and their new A-50T Phalcon AWACS Aircraft. The exercises will last until Nov 3/10. India Times | Frontier India | k2p.

Oct 1/10: Engines. India’s Business Standard may want a word with its sources. GE announces that its F414 engine has been picked to power the Tejas Mk.II fighter. India’s Aeronautical Development Agency (ADA) will order 99 jet engines, with GE Aviation supplying the initial batch of F414-GE-INS6, engines and the rest manufactured in India under transfer of technology arrangements. At present, this is just “preferred bidder” status, not a contract yet.

The selection of GE’s F414 deepens a relationship that has supplied 41 earlier model GE F404 engines so far, in order to power initial Tejas LCA Mk.I fighters and LCA Naval prototypes. GE describes the F414-GE-INS6 as “the highest-thrust F414 model,” without offering specifics, but is has been working on an F414 Enhanced Performance Engine. The INS6 will add single-engine safety features in its digital controls, something GE also installed in the F414 variant powering one M-MRCA candidate, the JAS-39 Gripen NG. The F414 also powers the Super Hornet family.

Sept 20/10: Engines.India’s Business Standard reports that the European EJ200 engine may have the edge in the competition to supply the Tejas Mk.II fleet’s powerplants:

“Informed sources have told Business Standard that when the bids were opened last week, European consortium Eurojet bid $666 million for 99 EJ200 engines, against US rival General Electric, which quoted $822 million.”

Both engines have been ruled technically suitable, so the lower priced bid will win, but the bidding process isn’t 100% final yet. The paper also quotes Air Vice Marshall Kapil Kak (ret.) of the Indian Air Force’s Centre for Air Power Studies, who draws the obvious conclusion:

“It is as clear as daylight. Selecting the EJ200 for the Tejas would boost the Eurofighter’s prospects in the MMRCA contest. Its engines, which form about 15-20 per cent of the cost of a modern fighter, would be already manufactured in India for the Tejas [after the 1st 10 were built abroad]. For the same reason, rejecting the GE F-414 would diminish the chances of the two fighters [F/A-18 E/F Super Hornet and JAS-39NG/IN] that fly with that engine.”

Aug 12/10: Competition. Boeing Defence, Space and Security India head Vivek Lall touts the benefits of their International Super Hornet Roadmap for India, and India’s ability to particpate in it and add new features to the platform. Brahmand.

Aug 7/10: Competition. India’s Times Now news show reports that the M-MRCA trials will leave only Dassault’s Rafale and EADS’ Eurofighter in the race. That turns out to be true. Brahmand | Livefist.

July 27/10: Remaining process.India Today reports on the remaining M-MRCA process. Elsewhere, it echoes nebulous rumors that some of the candidates failed high-altitude testing at Leh:

“After this, the “commercial bids” of each would be opened by the defence ministry mandarins, who will, for the first time, examine the commercial offers made by the companies more than two years ago. For the first time, a new system of costfixing has been introduced that not only takes into account the unit prices but also calculates the ‘life cycle costs’-which takes into account the cost of maintenance and spares for the period, estimated at 40 years, the aircraft would remain operational. On the basis of this, the lowest bidder (L1) would be determined by a commercial negotiation committee headed by an additional secretary of the ministry. The committee will also have members of the service headquarters of the army, navy and air force. They would then conduct price negotiations with the L1 bidder to improve upon the initial offer. Finally, a paper would be prepared for the Cabinet Committee on Security that would have to give its seal of approval and award the contract. It is at this stage, before the contract is awarded, that government-to-government negotiations would be conducted to get the best additional benefits for the country.”

July 21/10: F-16 refueling innovation. At Farnborough 2010, HAL and its partners announce a significant piece of equipment for global F-16s. Right now, F-16s can only be refueled via a dorsal refueling boom, but many air forces depend on refueling probes that fit into hose-and-drogue systems, a preference shared by the US Navy. India’s competition requires hose-and-drogue refueling – and now a team of HAL, Lockheed Martin, Flight Refueling Ltd. in the UK, and Israel Aerospace Industries has a solution.

Many F-16s already carry conformal fuel tanks that add lots of fuel, but minimize the associated drag and performance hit. The Conformal Aerial Refueling Tank System (CARTS) modifies the right-forward conformal tank to include a pop-out refueling probe, and the system feeds fuel into the fighter directly through the same refuel manifold that a refueling boom would use. This makes CARTS a plug-and-play solution that can be retrofitted to global F-16 fleets, and gives the team a key niche product no matter what choice India makes. Defense World | F-16.NET (incl. picture).

July 20/10: Super Hornet International. Boeing’s VP and General Manager of Global Strike Systems, Shelley Lavender, announces a “Super Hornet International Road Map” at Farnborough 2010. Technology modifications would include internal IRST to detect infrared emissions from enemy aircraft (instead of the US Navy’s current retrofit approach using a modified centerline fuel tank), an enclosed weapons pod to lower radar signature that can carry up to 2 AIM-120 AMRAAM missiles and 2 JDAM 500 pound smart bombs, full spherical laser and missile warning systems, a new cockpit based on large touch-screen technology, improved F414 engines (EDE/EPE), and conformal fuel tanks mounted up top to boost range.

These enhancements are described as an “international road map,” reflecting ongoing competitions in Brazil, Denmark, India, and elsewhere. These same modifications also have the potential to become part of a US Navy multi-year buy agreement with Boeing, if the Navy is willing. Presentation [PDF].

July 16/10: India’s Chief of Air Staff, Air Chief Marshal PV Naik, tells IANS that the Indian Air Force will sign the contract to buy 126 medium multi-role combat aircraft (MMRCA) “within a year,” [DID: not even close] and that the IAF flight evaluations will be ready by month-end, and submitted to the defence ministry. After that, the sealed bids will be opened and the aircraft will be short-listed for commercial evaluation. India’s Economic Times | Hindustan Times.

July 13/10: Sea Gripen? Flight International reports from Farnborough on JAS-39NG plans and testing, including plans to allocate development funds for a carrier-based “Sea Gripen” variant, as described above. Having said that:

“The Sea Gripen will not be developed by Sweden alone… but potential partners could include Brazil and India, who have been offered to do work in their own countries. [Gripen technical director Eddy] De la Motte says the “cost of that programme will be a couple of billion Swedish crowns; more than one billion [DID: over $135 million]. It will be half of the Gripen NG’s development programme cost.”

The big challenge is that India has already picked the MiG-29K as its carrier-borne fighter, and Brazil may well close its door by picking the carrier-capable Rafale. Other carrier-using countries have locked in their future fighter choices, with the exception of Thailand and Spain. This means the Gripen would need to win in Brazil, or depend on new countries joining the ranks of naval fighter operators, in order to make Sea Gripen viable. For now, the announcement adds to their existing bid in Brazil, and thanks to the stated need for a partner, it costs nothing up front.

“We will transfer some of our development projects, which we have in Europe for Eurofighter or other military aircraft to India, where we have set up a military research and development (R&D) centre in Bangalore… We will transfer 60 percent of the Eurofighter technology to India if Typhoon wins the bid. Our long-term strategy is to partner with the Indian aerospace industry for our global market, as we consider the Indian talent and resources… We also want to establish a division of our defence and security wing in India independent of the IAF order for Typhoon not to duplicate what we are doing in Europe but replicate its business model to leverage the potential of the Indian aerospace industry through joint ventures and offset projects.”

April 28/10: No decision for you. India needs to extend its competition for a year, because competitor flight trials won’t be finished until some time in May 2010. Today was to be the deadline and bid expiry, 2 years after accepting price quotes. India’s Defense Ministry has asked manufacturers to submit offers for an additional year. Flight trials remain underway at 3 key locations: near Leh, high in the Himalayas; a desert base in Rajasthan; and Bangalore’s tropical climate. The expectation is that the IAF will provide the government with 2-3 accetable options, then let the politicians pick.

Lockheed Martin (F-16 Block 60+) and Boeing (F/A-18 E/F Super Hornet) have said that they are modifying their bids, Sweden’s Saab (JAS-39NG) plans to extend its bid unchanged, and Dassault (Rafale), EADS (Eurofighter), and RAC-MiG (MiG-35) have made no public commitment one way or another. This 1-year delay could raise costs, but more favorable exchange rates could shift prices the other way. It also gives competitors who have deepened their Indian partnerships the ability to revise that information in their offer.

From the MMRCA bid due date of April 28/08 to April 28/10, the US dollar has risen against India’s rupee about 10.5%, while the Euro has become 6% cheaper, and the Russian rouble has become 11.6% cheaper.

March 9/10: Gripen trials. Sweden flies its Gripen fighters into Bangalore for MMRCA-related trials – but India’s Business Standard reports that they’ll be JAS-39D Gripens, not the new Gripen NG. That could get the platform disqualified, depending on the decisions made by the IAF and Indian MoD:

“The Gripen NG… has always been one of the hottest contenders in the fray. Saab’s default on the MoD’s trial directive, which lays down that the fighter being offered must be the one that comes for trials [leaves it] vulnerable to disqualification… the Swedish Air Force, having opted to buy the Gripen NG, has ordered a series of improvements on the Gripen NG prototype. With those under way, Sweden’s flight certification agency, SMV, has ruled that the prototypes require additional flight-testing in Sweden before the aircraft can be sent to India… Sources close to the Gripen campaign say IAF pilots will be offered a chance to fly the Gripen NG during a visit to Sweden from April 6 to April 10. Gripen International will also ask for fresh dates for bringing the Gripen NG to India for trials.”

2009

“The proposal for procurement of quantity 126 Medium Multi Role Combat Aircraft (MMRCA) for the Indian Air Force has not been finalized. The proposals received in response to the Request for Proposals are presently at Field Evaluation Trials stage. The estimated cost of the proposal is Rs. 42,000 crores approximately.”

Oct 16/09: Mirage 2000 backlash?India’s Business Standard reports that the long-awaited Mirage 2000 upgrade deal may have fallen through. The beneficiary would be the MMRCA competition for 126+ medium fighters, which would rise to 8 squadrons via a follow on order or local production of 2 more squadrons (40-48 planes, to replace 51 Mirage 2000s). According to their report, however, Dassault may have hurt its chances there, too:

“According to senior IAF sources, Dassault has refused to reduce its quota of Rs 10,000 crore ($2.1 billion) for extending the service life of the IAF’s Mirage-2000 fleet by fitting new radars and avionics. The Ministry of Defence (MoD) considers this price – Rs 196 crore ($41 million) per aircraft – unacceptably high… Israeli aerospace companies have reportedly entered the fray, offering to upgrade the Mirage-2000 for half the price being quoted by Dassault. The MoD, however, is not inclined to accept that offer.

…The IAF, traditionally a staunch supporter of Dassault and the Mirage-2000 fighter, is apparently changing its views. Dassault, say pilots, has badly damaged its credibility during the recent negotiations by arm-twisting the IAF over the supply of spares for the Mirage-2000 fleet.”

Sept 17/09: Radars.Russia’s RIA Novosti reports that Phazotron NIIR corporation has developed the Zhuk-AE AESA radar for the MiG-35, but Forecast International quotes Phazotron-NIIR head Vyacheslav Tishchenko as saying that “We are ready to develop a new advanced radar jointly with India.”

The Zhuk-AE reportedly meets the MMRCA RFP’s requirement of an active array radar with a target detection range of at least 130 km/ 81 miles. Phazotron general director Vyacheslav Tishchenko is quoted as saying that the X-band, AESA Zhuk-AE has a range of 148 km/ 92 miles, can track 30 aerial targets in the track-while-scan mode, and can engage 6 targets simultaneously. Tishchenko reportedly believes that detection range may be able to grow to 200 km/ 124 miles, as the design uses many elements of previous radars and is not optimized for AESA. See also APA’s “Phazotron Zhuk AE/ASE: Assessing Russia’s First AESA.”

Aug 13/09: MiG-35 late. Russian spokesmen reportedly say that production of the MiG-35 cannot begin before 2013-14, which means that the IAF would not be able to take delivery before 2014. Unless the competition itself is delayed, that’s likely to put the MiG-35 at a significant disadvantage against the other competitors, all of whom would be able to begin delivering aircraft by 2011 or even 2010. RIA Novosti | Deccan Chronicle.

July 6/09: US ITAR strongarm. Israeli and Indian newspapers report that the USA has pressured Israel’s IAI not to partner with Sweden’s Saab in the MMRCA competition against American firms. IAI would have offered integrated avionics and related systems for the MMRCA competition. Israel was forced to give the USA de facto veto authority over its weapons exports, as a condition of being eligible to participate in the F-35 fighter program.

The Jerusalem Post reported that the USA had expressed concern that “Western technology in Israeli hands would make its way to the Indians.” That’s a completely illogical concern, of course, given that Boeing and Lockheed Martin have been cleared to offer the most advanced versions of their fighter jets, complete with AESA radars, to India, in the same competition. The only logical conclusion is that the move is a pure political favor to Lockheed Martin and Boeing. The Jerusalem Post report adds that Israel was also pressured out of Turkey’s $500+ million tank competition – which American firm General Dynamics ended up losing to South Korea’s XK-2, anyway. Jerusalem Post | Indian Express | Zopag.

May 15/09: Rafale’s return. Indian media confirm that assault’s Rafale has been readmitted to the MMRCA competition. The “quality requirements” it had failed to meet reportedly involve information on key systems that was not provided to India, and that issue has reportedly been fixed.

The Rafale will now participate in MMRCA aircraft trials, and recently gained another boost to its prospects. Thales recently completed flight tests for its RBE2-AA active electronically scanned array (AESA) radar. The next batch of about 60 Rafales for the French air force and navy is expected to include this radar, and it will also be offered for export. domain-b | The Hindu | Times of India | Zee News.

India: another onebites the dust?(click to view full)

May 13/09:An Aviation Week report has this quote, despite statements by several Indian officials that the Rafale has been eliminated:

“We are still preparing, actively, technology demonstrations for later this year and early next year,” says Jean-Noel Stock, who leads Rafale efforts at Thales, which is responsible for around a third of the weapons system. He stresses that Rafale is still in competition for the 126 fighter deal… By year’s end, the company expects the first full-production contract for the [RBE2-AA] AESA [equipped Rafales] in France”

April 16/09: Rafale out? Indian media report that Dassault’s Rafale has been disqualified from India’s MMRCA competition. Exact reasons were not specified, beyond vague reports that “it did not meet the General Staff Quality Requirements.”

Dassault is measured in its public replies, stating only that Rafale International has not been formally made aware of any such decision. If these reports are true, however, Dassault’s move to strangle its Swedish competitor by denying it Thales’ radar may have ended up costing Thales any chance of an order from India.

America has an AESA technology lead, so its offerings are the most stable and mature. The F-16IN had the most choices. Ratheon’s RACR and Northrop Grumman’s SABR are both designed as drop-in AESA radars for the F-16, but Lockheed Martin chose Northrop Grumman’s AN/APG-80, which is already installed in the UAE’s F-16E/F Block 60s and has a 100% in-service record over 4 years. The other American contender, Boeing’s F/A-18 E/F Block 2, will use its standard AN/APG-79 AESA radar.

Dassault’s Rafale will use Thales’ new RBE2-AA, but its acquisition of a large shareholding in Thales means Saab’s JAS-39NG will not use an RBE2-AA front end as planned. Saab has a number of alternative AESA options, from Raytheon’s RACR to an enlarged version of Selex Galileo’s Vixen, but the uncertainty raises its risk profile in a number of ways.

Eurofighter reportedly had the most interesting but least mature proposals, involving AESA arrays built into other areas of the plane. Eurofighter GmbH is working on the CAESAR AESA radar, but hat is in early development. Accordingly, it touts its existing mechanically-scanned Selex Galileo ECR-90 Captor over in-service AESA radars. EADS Military Air Systems SVP of engineering Peter Gutsmiedl was reportedly talking about the option of adding small AESA side arrays, an azimuth gimbal, or even a canted AESA “swashplate” fitted to a rotating mount, inside a canted antenna. These embedded radar options would allow the benefits of AESA, but with a much wider scan radius that could radically change the engagement cone for radar-guided air-air missiles. If they are built, that is, and successfully tested.

February 2009: Saab.Defense Update reports that Saab’s Gripen is prominent by its absence at Aero India 2009. The single Gripen NG prototype is reportedly booked with flight testing activities, and cost cutting measures at Saab ran afoul of the expense involved in flying the plane to India.

Feb 10/09: Saab. Saab and TATA Consultancy Services (TCS) partnered Aeronaoutical Design and Development Centre (ADDC) has been awarded its first contract by Saab to participate in the aerostructural design and development for Gripen NG. Gripen International.

Jan 17/09: Indian Air Force chief Air Chief Marshal Fali Homi Major reveals that the IAF will conduct a fly-off of the 6 MMRCA contenders some time in April-May 2009.

Rumors have been started that Saab’s JAS-39 Gripen might be left out of these field trials as a result of the IAF’s Technical Evaluation Committee report, which is said to have been submitted to the Indian ministry of defense in mid-November 2008. That report has to be approved by the ministry before the field trials can begin. Those claims regarding the Gripen’s relative capabilities are difficult to reconcile with the roster of competitors. Meanwhile, Gripen International’s India director Eddy de la Motte says:

“We firmly believe the report does not have any basis and the news is incorrect. Gripen meets or exceeds every operational requirement raised by the IAF in all roles – air-to-air fighter, [beyond visual range/within visual range], air-to-surface land and sea, and reconnaissance.”

2008

JAS-39IN(click to view full)

Dec 8/08: Dassault.Dassault Aviation announces agreements with Tata Technologies’ subsidiary INCAT [DID note: not the Australian naval firm] for Engineering Services Outsourcing. Under the terms of the MoU, INCAT will provide Dassault Aviation with Engineering Services in a number of critical domains, in support of the Indian Air Force MMRCA program under its industrial offset requirements.

The services would use INCAT’s Global Delivery model, delivered largely from the recently-established INCAT HAL Aerostructures Limited (IHAL) dedicated aerospace engineering services centre joint venture in Bangalore, India. It would be backed up by INCAT’s delivery teams in France and the USA.

Nov 6/08: India Defence reays concerns from Dassault Aviation’s senior vice president for military sales J.P.H.P. Chabriol. After observing that the Rafale, F/A-18E/F Super Hornet and Eurofighter constitute one tier of price and capabilities, and the F-16, JAS-39 Gripen, and MiG-35 constitute another, he adds that:

“The IAF’s RFP (request for proposal), in the first analysis, in terms of performance, is not extremely demanding. We don’t want a situation where the other three aircraft are compliant with the RFP but we lose out on the price differential… The IAF has to decide whether it wants a heavy aircraft or a light aircraft… Quite obviously, there would be a price differential if a single or a twin-engine jet is chosen. If India takes the L-1 (lowest tender) route this would be unfair because we have a good product but this quality comes at a price.”

It shoud be remembered that Dassault withdrew its own Mirage 2000 lightweight fighter from the MMRCA competition before the RFP was finalized. Chabriol reportedly added that Dassault had made an ‘unsolicited offer’ of 40 Rafales as well, presumably as an inducement toward a dual platform “high-low” MMRCA buy. India Defence.

Nov 5/08: Rafale: full tech transfer.domain-b reports that France’s government gas approved full technology transfer for the Rafale fighter, including the AESA radar currently under development for that platform. The decision could also have corollary benefits for Saab’s Gripen, as Saab is currently engaged in a joint development arrangement with Thales around the RB2 for its JAS-39 Gripen NG.

Dassault Aviation’s senior vice president for military sales J.P.H.P. Chabriol added that Source code transfer would be included. This is a major step, as it would enable the IAF to program the radars itself without having to specify mission parameters to foreign manufacturers. Chabroil also pointed to the lack of American components in the Rafale, which generates concern in some Indian quarters despite sbstantially improved relations with Washington:

“The Gripen is powered by a US engine and has other US components too. Similar is the case with the Eurofighter, which has quite a few American parts. So, they would have to first seek the US government’s approval. In the case of the F-18, approval would have to be sought not only of the government but also of parliament [US Congress]. This legislative approval is not an issue in our case.”

“The competition is very tough, but we have several trump cards – the MiG-35’s superb performance characteristics and the fact that Russia and India share a long-standing partnership in strategic and political cooperation… So far, none of the participants has met the demands of the tender put forward by the Indian air force…”

Sept 10/08: Saab. Saab announces a letter of intent with Tata Consultancy Services Limited (TCS), regarding establishment of an Aeronautical Design and Development Centre (ADDC) in India. The centre is not aimed at any particular program but will explore market opportunities in areas such as aero structures, aero systems, avionics and after market support for both military and civil aeronautical applications. Saab release.

Aug 4/08: RFP Bids In. The RFP responses are in, and are being evaluated. India’s Economic Times reports that 3 of the bidders have just submitted their companion industrial offset proposals so far: Boeing (F/A-18E/F), EADS (Eurofighter), and Lockheed Martin (F-16IN).

Boeing said it would meet its obligations through a line up that includes 37 Indian partners in the public and private sectors. Lockheed Martin noted that it had already established 4 F-16 production lines outside the USA. EADS mentioned a “fully-fledged response,” but did not otherwise go into much detail; like Boeing, cooperation with its civilian arm (Airbus) is a near-certain component of their offer.

Industrial offset esponses from Dassault (Rafale), Gripen International (JAS-39NG), and Rosoboronexport (MiG-35) are reportedly still pending. They are also due in August.

RFP bids in

May 28/08: EADS. EADS is quoted as inviting India to become the 5th country and the first outside Europe to become part of the Eurofighter consortium. The industrial example of Spain’s participation is used. The Hindu’s report adds that EADS is also prepared to involve India in its supersonic jet trainer development program (the stalled Mako project, which needs an external partner to move forward) as well as unmanned aerial and undersea vehicles.

Phase 2 supplies HAL with 17,000 parts and over 1,000 tools for assembly.

The final 54 aircraft of Phase 3 would have the entire range of the airframe’s 30,000 parts built in India, with the last aircraft delivered by 2020.

With respect to radar technology transfer, Raytheon’s Dave Goold states the obvious when he says that “Our response has been fully compliant with the IAF request for proposal (RFP). However, the extent of technology transfer would be dependent on the permission we receive from the US government… The issue is under discussion.” If technology transfer is limited by the government, this could result in AN/APG-79 radars being supported in India but manufactured entirely in the USA. The question is whether that would disqualify the Boeing bid outright, or force a shift back to earlier APG-73 radars. The extent of radar technology transfer is reportedly set at 60% in India’s RFP. News Post India report.

April 28/08: MMRCA bids due. Gripen International delivers its MMRCA bid to India’s Ministry of Defence. The JAS-39IN is based on the Gripen NG/ Gripen Demo, and includes an AESA radar and an IRST (InfraRed Scan and Track) system, a Transfer of Technology (ToT) program, a life-time logistics support solution sourced from Indian suppliers with support from Saab and its partners, and full industrial offset cooperation. Eddy de la Motte, Gripen International’s India Campaign Director:

“Gripen IN will provide India with a capability that offers complete independence of weapon supply… We will do this by transferring all necessary technologies to enable Indian industry and the Air Force to build, operate and modify Gripen to meet all indigenous requirements over time.”

April 24/08: Boeing delivers a 7,000-page proposal offering its advanced F/A-18E/F Super Hornet to the Indian Air Force, and The U.S. Embassy in New Delhi will formally hand it over to Indian Ministry of Defense. The F/A-18IN includes Raytheon’s APG-79 Active Electronically Scanned Array radar, and Boeing is also touting the claim that “the fighter won’t need a scheduled visit to a maintenance depot until it has clocked a minimum of 6,000 hours of flying time, and even well beyond that.” Delivery of the first F/A-18IN Super Hornets can begin approximately 36 months after contract award.

Over the past 36 months, Boeing IDS has signed long-term partnership agreements with Hindustan Aeronautics Limited, Tata Industries, and Larson and Toubro. Boeing’s release announces that: “If the F/A-18IN Super Hornet is selected, these companies and others are expected to play a significant role as Boeing transfers some production and assembly to India.”

Feb 26/08: Bid extension. The Indian government has extended the date of submission for technical and commercial bids for the MMRCA program from March 3/08 to April 28/08, while the deadline for offset bids has been extended from May until August 2008. Defense News.

Feb 25/08: Offsets challenge. Securing over $5 billion (50% of $10+ billion) in industrial offsets is a difficult task, if a country has almost no private sector defense firms to speak of. That’s India’s problen, and it extends beyond MMRCA to other major buys. In order to deal with that problem, India is borrowing a page from its silicon entrepreneurs.

The Mumbai based India Rizing Fund is on the look out for Small and Medium Enterprises engaged in defence equipment related production, which it plans to back with up to $300 million: an initial fund of $100-140 million equivalent, with the potential to add another $300 million equivalent. The time horizon is 10-14 years, and susequent Aero India 2009 interviews indicate a desite for 15-30 active companies in the portfolio receiving capital, management assistance, and other Venture Capital type support. Silicon India.

2006 – 2007

“The Ministry of Defence has received no offer from the United States for transfer of high technology weaponry including its 5th-generation joint Strike Fighter F-35.”

There have been reports of a Lockheed Martin MMRCA offer mixing F-16s early and F-35s later, but this is one of those “seems to say more than it does” statements. It is strictly true, as any offers would have come from US manufacturers. Formal export approvals and offers from the United States would follow the standard DSCA announcement + 30 days process, once the Indian government had picked a winner.

Oct 10/07: Delay.Jane’s Defence Weekly quotes analysts predicting a six-month delay in the procurement, and adds that some Western bidders believe they are being negatively affected by the myriad of conditions in the RFP:

“Deba R Mohanty, a senior fellow in security studies at the New Delhi-based Observer Research Foundation – who reviewed a copy of the RfP shortly after it was issued to the six contenders – told Jane’s in early October that the complexity of the RfP document is the main reason why the deadline is likely to be delayed a further six months until September 2008.”

Aug 30/07: Industrial challenge.Reuters reports that the MMRCA’s 50% industrial offset requirements could be a huge challenge for bidding companies:

“I think there’s a lot of concern in industry”… said retired Lt. Gen. Jeffey Kohler, who stepped down on Wednesday as chief of the U.S. Defense Security Cooperation Agency. Establishing a process for proper crediting of the newly created business with the Indian defense ministry and integrating new production would be a “big challenge,” he said in a telephone interview with Reuters. In addition, Kohler said there were questions about whether companies such as Hindustan Aeronautics Ltd, which would be a primary beneficiary, could absorb all the new opportunities to be sent its way.”

If industrial offsets prove to be a problem, this would improve the prospects for RSK-MiG (MiG-35), who already has co-production arrangements in India, and for Boeing (F/A-18), EADS (Euofighter) and Saab (JAS-39 Gripen), who can offer civilian industrial offsets in the airliner and automotive sectors.

Aug 21/07: Russia. Russia showcases its MiG-29K carrier-based fighter specially developed for the Indian Navy at the 8th international aerospace show ‘MAKS-2007’. The MiG-29K is equipped with modified ‘Sea Wasp’ engines providing greater thrust in hot and humid tropical climate of the Indian Ocean. The Economic Times report adds that “Eying the USD 9 billion contract for the delivery of 126 medium multi-role combat aircraft (MMRCA) to the Indian Air Force, Russia’s MiG Corporation has also fielded its favourite MiG-35 and MiG-29OVT with thrust vectoring engines.”

July 2/07: Saab. Gripen International continues to tout its aircraft for India’s MRCA competition. India Defence reports that the firm has gone one step farther than the July 2006 promise to have all airframe production take place in India. The firm stresses that the aircraft would be next-generation “Gripen Demo” aircraft, and adds that they were “willing to provide all the know-how for India to carry out modifications according to its needs.” This is a very high level of technology transfer, and resembles the benchmark adopted by the partner nations in the F-35 Joint Strike Fighter consortium.

India’s government is still finalizing ground rules for the MRCA competition.

Nov 6/06: AESA for MiG-35s?Jane’s International Defence Review reports that Phazotron-NIIR in Moscow, Russia is completing 2 prototypes of the Zhuk-MAE active electronically scanned radar. They’re hoping to offer it with the MiG-29OVT (MiG-35) fighters being tendered by Russia. RSK MiG required a first flight with the experimental Zhuk-MAE radar during the first half of November 2006, in order to meet its goal of demonstrating it at the February “Aero India 2007” exhibition in Bangalore, India.

Oct 3/06:India may fast track MRCA deal. According to this report, recent crashes and uncertainty over the Tejas light fighter are upping the pressure on the IAF, and the M-MRCA RFQ(request for quotes) may be accelerated. Accelerated compared to what, one wonders?

Sept 6/06: Russian engine deal.India’s HAL will produce R-33 engines for the MiG-29 under license, in a $275 million deal. DID explains the deal, and why it probably improves the MiG’s chances even though the MiG-29OVT/MiG-35 uses the RD-133 thrust vectoring engine.

June 14/06: F-16I?Defense News says that Lockheed may offer India Israel’s F-16I “Sufa” (“Storm”) as its MRCA entry. This unusual, because the F-16Is have many of their avionics and electronics replaced with Israeli technology.

India already uses a lot of Israeli electronics in its upgraded Russian aircraft, and the move would create commonality while leveraging a combat-proven design with extra strike capability. Still, Defence News notes that if Lockheed does offer the F-16I to India, it would be the first time an extensively modified US fighter containing non-US-made avionics, weaponry and major sub-systems had been offered at the front end of an international competition. It has happened before, but only when customers explicitly requested it, vid. Chile and Singapore.

Footnotes

fn1. STOBAR = Short Take-Off But Assisted Recovery. Means it has no catapult and so uses a “ski jump” in the front, but uses arrestor wires to catch returning aircraft because it flies conventional aircraft rather than STOVL (Short Take-Off, Vertical Landing) planes like the F-35B or planes like the Sea Harriers. Sea Harriers are used on India’s existing Viraat (ex-Hermes) carrier, in a V/STOL (Vertical/Short Take-Off and Landing) arrangement.

Appendix A – MMRCA: The Naval Angle

F/A-18F, carrier landing(click to view full)

In February 2006, Jane’s Defense expressed the belief that India would increase its initial requirement from 126 multirole combat aircraft (MRCA) to around 180-190 aircraft, with the additional number being considered for acquisition by the Indian Navy. If true, it would have been an even bigger change than allowing medium-high end multi-role fighters into the competition. Reports from other outlets varied, however, and some had India standing firm at 126 aircraft.

The Indian MoD release only mentioned 126 aircraft, but there is an option for another 64 aircraft on the same terms; if true, this would bring the potential deal up to 190 aircraft.

The RFP has not been made available to the public, but naval compatibility requirements did end up influencing the competition, as manufacturers considered the advantages of fielding a plane that was able to operate from India’s future STOBAR[1] carriers like the INS Vikramaditya (ex- Admiral Gorshkov) . Or the Vikrant Class (aka. Air Defence Ship), which will reportedly weigh in at 37,500 tonnes with a design that is heavily influenced by Italy’s Cavour Class.

The Boeing F/A-18 Super Hornet, and Dassault’s Rafale-M variant, were already navalized fighters, with structures designed to resist both corrosion and the controlled-crash stress of carrier landings. They currently operate from catapult-equipped carriers, however, rather than the “ski-jump” designs used in INS Vikramaditya and the forthcoming Vikrant Class. Some testing would be required, if India envisages a dual-role for any of its M-RCA planes.

Rafale-M carrier launch(click to view full)

By the end of the competition, other options existed as well. At Aero India 2011, Eurofighter GmbH and BAE unveiled an initial, internally-funded Eurofighter Naval design. Their release expressly promoted their belief that it could operate at full load from ski jump carrier decks (STOBAR).

Saab’s 2010 promotion of a “Sea Gripen” concept, without more advanced work to back it up yet, looked like it was designed to offer both budgetary resolution using a cheaper platform, and an opportunity for Indian firms to play a larger design role in the estimated $135 million development program. In May 2011, however, Saab announced that it was proceeding with independent development of a Sea Gripen variant, which would leverage their fighter’s built-in Short Take-Off and Landing capabilities.

In a similar vein, Russia’s MiG-35 M-MRCA contender is related to the MiG-29K naval variant that India is already buying. If Russia wished to invest in the idea, a carrier-capable MiG-35K may also be doable – if the extra weight of the new fuel tanks doesn’t create a problem, given the hard impacts of carrier landings.

Sea Gripen Concept(click to view full)

Recall, however, India’s need to replace large numbers of aircraft. The Super Hornet reportedly has a stable, proven flyaway cost around $60 million. Existing JAS-39 Gripen fighters reportedly sit in the $40-50 million range, but Gripen NG and Sea Gripen modifications would each drive up the price. MiG-35s have no benchmarks for price yet, but their base MiG-29s are relatively cheap, and even a MiG-35 is expected to sell for under $50 million. The Rafale and Eurofighter, on the other hand, have both been cited as $100+ million planes.

A naval requirement within the competition looked like it would increase the pressure to split the order between high-expense platforms, and a cheaper lightweight fighter contender. Alternatively, India may simply decide to remain on its own naval aviation path. The country is funding a navalized variant of its Tejas LCA lightweight fighter, and plans to operate navalized MiG-29Ks alongside them. They could decide that higher-end naval cousins to the IAF’s M-MRCA fighters are unnecessary at this point, and that they would rather spend the same funds to field new ships, submarines, maritime patrol planes, etc.

Time will tell.

Appendix B – Dassault’s Big Move: Au Revoir, Mirage

AvWeek 2011 analysis(click for video)

One pre-RFP surprise was the withdrawal of the Mirage 2000 from the unofficial competition, even though the aircraft has a good record in IAF service. One Aviation Week report claimed that the shift took place following India’s rejection Dassault’s offer to avoid a competition, and shift the entire Mirage 2000 production line to India. According to that version of events, Dassault Aviation originally considered staying out of India’s competition entirely, but its CEO eventually calmed down.

If that version of events is true, then by 2006 the size of the opportunity, and the Rafale’s need for an export success, drew Dassault back in. According to India Press Trust, Chacks Edelstenne, CEO of Dassault Aviation, visited the Minister of State for Defence Rao Inderjit Singh and The Deputy Chief of the Air Staff Air Marshal AK Nangalia on Feb 21/06. He informed his audience that:

“…we are on the verge of closing the Mirage fighter assembly line and want to offer India a quantum jump in technology… Though India has not not floated the Request for Proposals (RFP), we have conveyed to India to supply 40 Rafale multi-mission fighters in single source deal.”

Opportunities and Mirages

IAF Mirage 2000TH takeoff(click to view full)

A Mirage 2000-9 entry would have had a number of strengths. One is compatibility with Mirage 2000s already in service, which performed very well in the 1999 Kargil skirmishes. An infrastructure already exists for industrial offsets, and its low end price could be raised, along with its capabilities, by adding equipment developed in the Rafale program. India was already been negotiating with France along those lines, for upgrades to its existing fleet.

Industry analyst Richard Aboulafia points out that the history of global fighter purchases shows strong clustering at the lower-price end of the market; shutting down Mirage 2000 production will shut Dassault out of that niche, leaving it to new entries like India’s own Tejas LCA.

Indeed, the Mirage 2000’s potential performance similarity to the Tejas LCA project was both its weakness and its strength in India. One the one hand, Mirage 2000s offered a good insurance policy if confidence in the Tejas fell. On the other hand, it would not be seen as adding enough to the force mix, if confidence in the Tejas program remained high.

So, Why the Switch?

Mirage 2000v5(click to view full)

Media reports note that India’s decision-making speed may have had something to do with the Dassault switch, as company sources claimed that it would take at least 3-4 years for a contract to actually be signed with India. Given the pace of the MRCA competition thus far, and India’s procurement history, that estimate may be conservative. The word is that the French government thought that it would be too expensive to keep the Mirage production line running during that period, without additional export prospects.

Dassault had reportedly assured India that its extensive Mirage repair and servicing facilities set up by Hindustan Aeronautics Limited at Bangalore would require only ‘limited modification’ to accommodate the Rafale, given its commonalities with the Mirage 2000s.

Which still leaves the question hanging: why the switch?

Dassault may be completely up-front about the officially stated reasons behind this choice: a leap ahead in technology, which might boosts the Rafale’s chance of securing an export order that would be critical to its long-term future. Dassault may also have decided that the introduction of the F/A-18 Super Hornet, MiG-35, and changing requirements in the RFP made the Mirage a loser anyway.

That analysis would be borne out in 20/20 hindsight, thanks to progress on India’s Tejas fighter, and to the IAF’s push for aerodynamic performance over all other considerations.

Whatever the reasons, the withdrawal of the Mirage 2000 from the competition was official and final. The official RFP announcement specifically mentioned Dassault’s Rafale instead, and the Rafale appears set to receive the MMRCA contract.

Appendix C – MMRCA: Competitors & Analysis

AESA usage concept(click to view full)

Recent changes in India’s needs and the contest participants are changing the relative rankings of the contenders. Geopolitical considerations are also intruding, as most of these choices have the potential to improve relations with an important potential ally. Standardization arguments will also carry weight. As of January 2006, India’s Air Force operated 26 different aircraft types, and the IAF is not eager to add to its support headaches.

The listed competitors group into two very different categories with their own strengths and weaknesses: lightweight fighters in the $25-50 million flyaway cost range (F-16 Falcon, JAS-39 Gripen); and larger dual-engine mid-range fighters in the $65-120 million flyaway range (Eurofighter, F/A-18 Super Hornet, Rafale). Russia’s MiG-35 sat somewhere in the middle, as a bulked-up next-generation version of a twin-engine MiG-29 design that was generally seen as an F-16 competitor.

All MMRCA contenders to date appear to be proposing Active Electronically-Scanned Array (AESA) radars in their fighters. They offer a number of benefits over conventional mechanically-scanned radars, including durability, maintenance, the ability to track both air and ground targets via continuous scans instead of rapid switching, and potential electronic attack uses. A narrower field of view with less sidelobe “leakage” is both an asset and a drawback, depending on the situation.

Shortlisted

Rafale w. Scalp(click to view full)

The shortlisted fighters have a long shared history. Dassault’s Rafale was developed when France parted ways with its erstwhile European partners, who went on to develop the Eurofighter. Both types have been fielded without full capabilities, and both have had trouble landing export orders. The EADS/ BAE/ Finmeccanica consortium is looking for Eurofighter’s 2nd major export sale, after Saudi Arabia. Dassault is still looking for its 1st export win.

Rafale (Dassault, France). Initial reports indicated that the Rafale did not meet India’s technical evaluation criteria, because critical information was not included. Dassault persisted, and their fighter is now back in the race.

The Rafale offers good aerodynamic performance, has exceptional ordnance capacity for its size, and can extend its range further via conformal fuel tanks. Dassault claims Mach 1+ “supercruise” capability without afterburners, but observers are skeptical, and it has been challenging to demonstrate this with the Snecma R88-2 engine. The Rafale also offers some equipment, maintenance and spares commonalities with existing Mirage 2000 fleet, which will increase as India’s Mirage 2000s are modernized with new electronics and weapons. France’s reliability as a weapons supplier, good history of product support, and long-standing relations with India, offer additional plusses. The Rafale-M’s demonstrated carrier capability might be attractive, too, but that requires catapult launch capabilities, which India’s Vikramaditya carrier will not possess.

India’s slow procurement system has had the side-effect of mitigating most of the Rafale’s weaknesses. Rafales acquired combat experience over Libya with the Damocles surveillance and advanced targeting pod, as well as the new Reco NG reconnaissance pod. Thales’ RBE2-AA AESA radar has been installed, and is now much closer to fielding. While it will still require additional funds and work to integrate many non-French weapons if one wishes to use them on the Rafale, India’s long-delayed contract to upgrade its Mirage 2000s makes that less urgent, by widening the IAF’s aircraft base for the Rafale’s French armaments.

The Rafale’s failure to win any export competitions was also an issue – one that reaches beyond mere perception of “also-ran” status. As Singapore’s choice has shown, export failures are already forcing cuts in future Rafale procurement, in order to pay for modernization. That dynamic is likely to get worse over the next 30 years, unless a big buyer like India steps up. Fortunately for Dassault, the Rafale was picked as India’s “L1” package. That big buyer could be just around the corner.

India’s delay has given the fighter more time to mature, and upgrades and new weapon options are giving current production versions full multi-role capabilities. Typhoon fighters reportedly have “supercruise” capability, though it probably isn’t sustainable once the fighter is armed. Eurofighter GmbH even unveiled a proposed naval variant at Aero India 2011, which it claims could launch without catapults from the “ski-jump” decks on India’s future carriers.

With respect to industrial offsets, BAE already has an order from India for 123 BAE Hawk trainers, 69 of which are being built in India. Those Hawk orders ran into trouble, but the troubles were resolved, and India upped the order from 66 to 123. That gives BAE solid industrial experience and credentials, and given EADS’ key role in the Eurofighter consortium, Airbus might also be able to contribute.

Weaknesses include the aircraft’s $100+ million price tag, which may stretch India’s budget to the breaking point; the fact it’s a new aircraft type for the IAF so the entire support infrastructure would have to be developed; its lack of naval capability; the developmental status of its CAPTOR-E (Captor AESA Radar) technology; and the non-existent geopolitical benefits of selecting it. Given the Eurofighter’s performance and costs, simply buying more SU-30MKIs would appear to make far more sense. India’s shortlist process ignored cost, however, so Eurofighter made the short list.

Not Shortlisted

F/A-18E, Parked(click to view full)

F/A-18 E/F Super Hornet (Boeing, USA). Highly upgraded version of the F/A-18 A-D Hornet, enlarged and given new engines and avionics. Commonality between the Hornet and Super Hornet is only about 25%. Strengths include its powerful AN/APG-79 AESA radar, which has drawn significant interest from India. This radar could allow Super Hornets to play a unique role in India’s fighter fleet as versatile “quarterbacks” (or better yet, “cricket captains”) due to their radar’s performance and information sharing abilities. Other advantages include carrier capability, a very wide range of integrated weapons, a design that is proven in service and in combat, F414 engines that may also serve as the base for LCA Tejas Mk2; and complete assurance in its future upgrade spiral, given the US Navy’s commitment to it.

The existence of a dedicated electronic warfare variant as of 2009 in the EA-18G Growler offers a unique selling point, as the growth of sophisticated air defense systems will place a growing premium on this unique capability.

Last but certainly not least, this choice offers an opportunity to create an early “win” which would strengthen India’s new alliance with the USA and prove its new status in the world. After all, when clearance for the aircraft’s export to India was given, no other nation had even been offered the F/A-18 E/F Super Hornet. Since then, close American ally Australia has bought 24 F/A-18F Block IIs, and even taken steps to modify 12 aircraft toward EA-18G Growler status, giving the platform an additional selling point in the “allied commonality” department. Defense industrial requirements are helped by Boeing’s network of Indian investments and relationships, stemming from its P-8i sea control aircraft sale and commercial push into India.

Weaknesses of the Super Hornet platform included deep distrust of America’s reliability as an arms supplier, technology transfer concerns, and the aircraft’s expense. Given the costs to other customers so far, it seems unlikely that Boeing can deliver 126 fully-equipped F/A-18 E/F Block II aircraft for just $10.2 billion, let alone aircraft plus lifetime support. Since it’s a new aircraft type for the IAF, that entire support infrastructure would have to be developed from the ground up. Finally, the Super Hornet offers poorer aerodynamic performance than the Eurofighter or Rafale, due to inherent airframe limitations. Carnegie Endowment’s Andrew Tellis says that last disadvantage was the killer.

F-16F “Desert Falcon”(click to view full)

F-16 Fighting Falcon (Lockheed Martin, USA). Lockheed’s “Block 70” offering would have been an modified version of the F-16E Block 60 “Desert Falcon” currently serving with the UAE. Strengths include the widest multi-role capability among lightweight fighters; its proven AN/APG-80 AESA radar; the addition of integrated IRST (Infra Red Search & Track) capability; the widest choice of proven avionics and weapon systems; a long record of proven service so all issues are known; and widespread compatibility with potential allies in Asia and the Middle East who also fly F-16s. The combination of an AESA radar on a less expensive platform is also good news for cruise missile defense efforts, if that’s considered a priority.

Even so, the Indian Air Force never seemed very interested in the F-16. Weaknesses include the fact that Pakistan also flies F-16s; the fact it’s a new aircraft type, so the entire support infrastructure would have to be developed; and Lockheed Martin’s difficulty in complying with industrial offset provisions, given their lack of penetration in India. On the positive side, the MMRCA RFP’s delays helped Lockheed, by allowing them ample time to find arrangements with Indian firms.

There were some reports that the US government was pushing this option because of the regional reassurance factor, but an F-16 E/F Block 60+ would have a number of important advantages over even Pakistan’s new F-16C/D Block 50/52 aircraft. In exchange, however, aerodynamic disadvantages created by the Block 60’s added equipment, and perceptions that the platform had limited capacity for further upgrades, were reportedly fatal in India’s trials.

MiG-29OVT, MAKS 2005(click to view full)

MiG-29OVT, became the MiG-35 (Rosonboronexport, Russia). This modified MiG-29 includes improved radar and avionics that give it multi-role capability, extra fuel in a new aircraft “spine,” and thrust-vectoring engines a la India’s SU-30MKIs. While the MiG-29 has traditionally been considered a lightweight fighter, the combined effect of these changes push the MiG-29 toward the mid range.

Its strengths included compatibility with India’s existing and future MiG-29 fleet, and its ability to carry advanced Russian missiles already in service: the revolutionary AA-11/R-73 Archer and longer range AA-12/R-77 “AMRAAMski.” The presence of MiG-29-related manufacturing and maintenance, including a new plant for license-building RD-33 Series III engines in India, would make compliance with industrial offset requirements easier.

The MiG-29’s biggest weaknesses were short range, engines that produce telltale smoke (very bad in air combat) and lack of true multi-role capability; the MiG-35 largely fixes these issues, and may even add an AESA radar of its own if Phazotron-NIIR can have its new Zhuk-AE ready in time. Technology sharing and co-production are also considered to be strengths; as one Indian officer put it: “Russians have their problems of delayed projects and unreliable spare supply but they give access to everything, unlike the Americans.” He’s referring to the IAF’s not-so-great experience with India’s existing MiG-29s, which have had maintenance problems in addition to their other deficits.

Remaining weaknesses in the MiG-35 bid include the serious difficulties India has had with Russian firms over the refit of its new carrier, orders for more Mi-17 helicopters, and an order for 3 more Krivak-III class frigates. All have featured failure to deliver, and post-contract price renegotiation demands that have raised prices up to 200%. Reports that MiG-35 delivery cannot start before 2014 at the earliest added a further disadvantage against competitors with active production lines, and rapid delivery capability.

There has also been legitimate speculation about the future viability of the MiG-29 family platform, which has been eclipsed by the SU-30 family. India ordered a handful of MiG-29K variants as its future carrier aircraft, and a few years later, Russia ordered some of its own. Even so, doubling down to add the MiG-35 would make India the first customer for both variants – neither of which has other sale opportunities on the near horizon. That could be spun as a positive industrial opportunity, but it was also a cost and risk issue.

JAS-39s in South Africa(click to view full)

JAS-39 Gripen (Saab, Sweden). The Gripen is a true 4th+ generation lightweight fighter and significantly more capable than category competitors like the F-16 and Mirage 2000, though the MiG-35 may give it a run for the money. Gripen NG begins to address the aircraft’s range limitations, and would include an AESA radar among its other enhancements. Other strengths include a wide choice of integrated weapons and pods; reasonable purchase cost; the fact that it has been designed for exceptional cost of ownership; and the ability operate from roads instead of runways if necessary. With respect to industrial offsets, Saab has made a strong offer, backed by excellent record in countries like South Africa, Hungary, The Czech Republic et. al.

As an interesting side note, the JAS-39NG’s use of GE’s F414G engine would have created future commonality with India’s own Tejas Mk2, which will also be powered by the F414 after DRDO’s Kaveri engine failures put the entire project in jeopardy.

The JAS-39’s drawbacks include its short range; the fact it’s a new aircraft type for the IAF; its AESA radar’s developmental status; perceived similarity (whether valid or not) to the Tejas fighter’s potential performance; and a low volume of international orders that raised questions about the platform’s ability to modernize over the next 30-40 years.

While ordering a Swedish fighter carries no geopolitical benefits, the platform did have a pair of wild cards. One was South Africa’s adoption, and Brazil’s potential adoption, of the Gripen. These 3 countries are beginning to collaborate more closely in defense matters, and a common fighter platform could have offered intriguing military and industrial benefits. The other wild card was less positive. The long-running Bofors scandal is reported to have tainted any future buys from Sweden, casting an irrational and unjustified, but still present, shadow over the Gripen’s chances.

Cast a Long Shadow: Tejas, F-35

HAL’s Tejas

Tejas LCA (HAL et. al., India). A lightweight, indigenously-developed fighter aircraft expected to enter service around 2010. Currently in testing using GE’s F404 engine, while India’s accompanying Kaveri jet engine project stalled and was scrapped in favor of a potential new engine partnership. The Tejas is not an M-MRCA competitor – but confidence in its development plans, its ability to stay under $25 million per plane, the potential for a naval variant, etc. has had a behind-the-curtains influence on every MRCA decision.

If it were operational today, the F-35B STOVL variant would probably be by far the best fit for India’s requirements. The planes would be carrier-capable from all of India’s naval air platforms, including smaller carriers the size of INS Viraat (ex-Hermes) or LHD amphibious assault ships, and could use roads and short field runways on land for maximum operational flexibility. F-35 JSFs would sport ultra-advanced systems that include the AN/APG-81 AESA radar, and incredibly advanced sensor systems and electronics that would make it India’s most capable reconnaissance asset, and even a potential electronic warfare aircraft. Other strengths would include greater stealth than any other competitor, which is critical for both air-air dogfights and strikes on defended targets. The Super Hornet may be able to fill the role of an aerial cricket captain, but the JSF is more like Sachin Tendulkar.

India has been invited to F-35 events. With potential US order numbers dropping, India might even be accepted into the program if they pushed for it. The F-35’s killer weakness was that it could not deliver the fighters in India’s time frame, even as India’s pursuit of its FGFA program with Russia offers it a semi-indigenous stealth alternative. Lockheed Martin and the US government have been pushing the F-35 ever since the F-16 and F-18 were eliminated, but even if India changed its mind, the F-35’s advanced systems, established industrial partnership structure and program procurement policies could make it nearly impossible to meet India’s technology transfer and industrial offset rules.

Airpower Australia (Sept 22/09) – Phazotron Zhuk AE/ASE: Assessing Russia’s First AESA. “The potentially large size of the Indian order has seen Western and Russian bidders disclose remarkably large amounts of data… Phazotron produced a special issue of their house journal Phazotron, which contains some very good technical papers by Phazotron engineers detailing the internals of the Zhuk-AE and its underlying design philosophy. This is the single biggest technical disclosure on any AESA design, globally, to date. This APA analysis is largely based upon this document…”

RIA Novosti, via WayBack (Sept 15/07) – Hard-hitting Russian fighter set to win Indian tender. Covers the MiG-35, aka. MiG-29OVT. Enumerates many of the plane’s changes and key characteristics, but like all Russian articles and corporate releases it tends to overstate at times.

Annex I – MMRCA: The RFP, Please…

IAF MiG-29, top view(click to view full)

India’s defense procurement process is definitely a game for the patient, and this competition has been no exception. The Medium Multi-Role Combat Aircraft (MMRCA) RFP caps a process that began in 2001, when the IAF sent out its request for information (RFI) for 126 jets. After delays lasting almost 2 years beyond the planned December 2005 issue date, India’s Ministry of Defence finally announced a formal Request for Proposal on Aug 28/07.

The RFP announcement estimated the program at 126 Medium Multi-Role Combat Aircraft (MMRCA), at a cost of Rs. 42,000 crores (about $10.24 billion as of the RFP date, or about $81.3 million per fighter). The 211-page document includes clauses for initial purchase, transfer of technology, licensed production, and life-time maintenance support for the aircraft. Under the terms of purchase, the first 18 aircraft will come in a ‘fly away’ condition, while the remaining 108 will be manufactured under Transfer of Technology. Some reports add an option for an additional 63-64 aircraft on the same terms, bringing the potential total to 190 aircraft.

Selection involves an exhaustive evaluation process as detailed in the Defence Procurement Procedures (DPP) 2006. The vendors had 6 months to submit their proposals. First, submitted proposals will be technically evaluated by a professional team to check for compliance with IAF’s operational requirements and other RFP conditions. Then extensive field trials will evaluate aircraft performance. Finally, the short listed vendors’ commercial proposals are examined and compared. The defence ministry’s Contract Negotiation Committee (CNC) would then hold discussions with the vendors before identifying their preferred manufacturer. Their report goes to the defence minister, who must forward it to the finance minister. After the file returns to the defence ministry, it goes for final approval to the cabinet committee on security (CCS).

This is not a speedy process. The selection process alone is likely to take at least 2 1/2 years, to be followed by lengthy price negotiations, and probably including delays along the way. Most observers believe that delivery of any aircraft is unlikely before 2013.

The vendor who finally wins will be required to undertake 50% offset obligations in India. That’s a boost from the usual 30%, which is required for Indian defense purchases over $70 million. The additional 20% was added because India is looking for a large boost to its aerospace and defense electronics industries, and understands that the size of their purchase gives them additional leverage. The Indian MoD’s RFP release adds that “Foreign vendors would be provided great flexibility in effecting tie up with Indian partners for this purpose.” It also says that:

“The aircraft are likely to be in service for over 40 years. Great care has been taken to ensure that only determinable factors, which do not lend themselves to any subjectivity, are included in the commercial selection model. The selection would be transparent and fair…

It may be recalled that the Defence Minister Shri A K Antony while chairing the Defence Acquisition Council Meeting on June 29, 2007 had outlined three guiding principles for this procurement scheme. First, the operational requirements of IAF should be fully met. Second, the selection process should be competitive, fair and transparent, so that best value for money is realized. Lastly, Indian defence industries should get an opportunity to grow to global scales.”

Once again, process speed is not a key criterion. Part of the reason for that is India’s past history of procedural problems. American competitions are increasingly finding themselves paralyzed by quasi-legal challenges of evaluation methods, and even of their chosen criteria. Witness the hold-ups created for the CSAR-X helicopter competition, Joint Cargo Aircraft, ITES-2 I.T. contract, etc. Indian competitions have featured these sorts of post-contract obstacles even more consistently, with long bureaucratic delays and corruption charges thrown into the mix for good measure.

Time will tell if the objectives of the MoD’s RFP are met, or if a process of waiting almost 6 years for an RFP, and then years more for a winner, is only the beginning of the process.

Even as India’s existing fighter fleet continues to wear out, and China and Pakistan’s fleets continue to grow.